Equity Office's results dip but meet analysts' estimates

Equity Office Properties Trust on Monday reported a decline in third-quarter results in line with analysts' expectations, as a decrease in rents and a drop in occupancy rates pinched the Chicago-based real estate investment trust.

Equity Office said funds from operations fell nearly 5 percent, to $362.3 million, or 77 cents a share, compared with $379.7 million, or 81 cents a share, during the third quarter of 2001, when more shares were outstanding.

According to Thomson Financial/First Call, the results matched analysts' estimates for funds from operations, or FFO, a key measure of profitability for REITs.

Revenue slipped to $881.5 million from $883.7 million in the year-earlier quarter.

The occupancy rate in the office portfolio fell to 89.2 percent from 90 percent at the end of the second quarter. Same-store net operating income, including properties acquired in a controversial 2001 merger with California-based Spieker Properties, fell 5.4 percent.

The Chicago-based real estate investment trust said third-quarter funds from operations rose more than 30 percent, to $121.1 million, or $1.41 a diluted share, from $92.9 million, or $1.23 a share, a year ago. The results were in line with analysts' expectations.

Total revenues rose about 26 percent, to $355.1 million. Net income rose to $44.5 million, or 71 cents a share, from $29.2 million, or 56 cents a share, a year ago. Same-store net operating income rose 3.9 percent. The occupancy rate held virtually steady at 88.7 percent.

The REIT also said that it expects to form a 50-50 joint venture with an institutional investor to acquire for $415 million the Glendale Galleria, a trophy, 1.5 million-square-foot mall in Los Angeles. General Growth said it signed a contract after the quarter ended and is still doing due diligence research. It expects the transaction to close late next month.

The report came out after the close of trading.

- Merrillville, Ind.-based NiSource Inc. reported third-quarter net income of $23.2 million, or 11 cents a share, on revenue of $656.1 million, compared with a net loss of $21 million, or 10 cents a share, on revenue of $684.9 million a year ago. The most recent result beat estimates by 3 cents a share. NiSource stock gained 63 cents, to $17.03, on the NYSE.